Guest Post: New York Fed Would LIke to Hear from Investors (But Not Anyone Like You)

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Served by Jesse of Le Café Américain

The New York Fed is creating an ‘investor advisory council’ and packing it with the outer circle of insiders, the banks being the In Crowd.

Its nice to hear that Pimco will now have greater access to the NY Fed.

Maybe the Fed would like them to explain how they are going to move hundreds of billions in new bond sales in the coming weeks, while propping the equity markets with hot money and no fundamental underpinnings. Is Goldman running out of ideas? Does Ben Bernanke have printer’s block?

The guy from the Treasury of the State of New Jersey must be there for a fade. I hear most of that state’s investments are in overseas accounts. Did the Treasurers of Michigan and California have scheduling conflicts?

The list of appointees are at the end of this press release. In case you were wondering, ZeroHedge, Karl Denninger, GATA’s Bill Murphy, Peter Schiff, Eric Janszen, Jon Stewart, and WalStreetPro are NOT included in the list of appointees. If they were, the NY Fed could make money by putting their meetings on Pay Per View or SpikeTV.

New York Fed Announces Creation of the Investor Advisory Committee on Financial Markets
July 24, 2009

New York—The Federal Reserve Bank of New York today announced the establishment of the Investor Advisory Committee on Financial Markets (IACFM). The committee will serve as a forum for informal discussions on financial, economic and public policy issues and help inform New York Fed President William C. Dudley and senior management. The IACFM is currently comprised of 13 prominent leaders in the investment community, and is solely an advisory group with no formal policymaking responsibilities.

The committee will combine the insights of a broad spectrum of investment professionals and strengthen the New York Fed’s relationships with a diverse group of market participants, ensuring policymakers hear a range of views on relevant issues.

Mr. Dudley said, “Since my arrival at the Bank in January 2007, we have expanded our contacts throughout the investment and trading communities. Through such relationships, we can enhance our understanding of how the private sector interacts with Federal Reserve operations, deepen communications between the Fed and market participants, and build confidence in Fed actions through greater transparency. Conferring with members of the IACFM is a natural extension of our work at the Bank.”

The creation of this advisory committee formalizes the ongoing expansion of our contacts and outreach by New York Fed staff. Currently, the New York Fed meets regularly with a variety of economists, representatives from the small business and agriculture sectors, thrift institutions and community banks, as well as leaders from community development organizations committed to assisting the low- and moderate-income communities in our District.

The New York Fed anticipates that committee membership will evolve to ensure additional perspectives are expressed in the committee. At this time, committee members include:

Keith Anderson
CIO, Soros Fund Management LLC

Nicole Arnaboldi
Vice Chairman of Alternative Investments, Credit Suisse Group

Louis Bacon
Chairman, CEO and Founder, Moore Capital Management LLC

William Clark
Director, State of New Jersey Department of the Treasury
Division of Investment

Mohamed El-Erian
CEO and Co-CIO, Pacific Investment Management Company

Garth Friesen
Principal, III Associates

Gary Glynn
President and CIO, US Steel and Carnegie Pension Fund

Joshua Harris
Managing Partner, Apollo Advisors LP

Alan Howard
Director and Co-Founder, Brevan Howard Asset Management LLP

Glenn Hutchins
Co-CEO and Co-Founder, Silver Lake

Sander Levy
Managing Director, Vestar Capital Partners

Morgan Stark
Managing Member, Ramius LLC

Thomas Steyer
Senior Managing Member, Farallon Partners LLC

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  1. Hugh

    So the echo chamber got larger but remains as empty.

    Did any of us expect anything different? William Dudley the New York Fed's new president was after all Goldman's chief economist.

  2. Ina Pickle

    Boy, would I pay to see that suggested line up around a table. Not the Fed's suggestions — Jesse's. I love Jesse.

  3. asphaltjesus

    I generally agree with the idea that this change adds no new information.

    These people have a world view that affirms the current order of things. Minor changes would be the most likely possible outcome. The changes have to benefit them and reaffirm their world view after all.

    I don't see how inserting malcontents would help the situation. It would be fun, but make a bad situation worse.

    Changes are needed and I don't necessarily think they start at the Fed.

  4. Steve

    Bear in mind that the Fed claims that the reserve banks are not subject to FOIA disclosure, unlike the Board of Governors, so all consultations with this group will remain sub rosa.

  5. Jojo

    Until the small "investors" pull their money out of the the manipulated markets and refuse to participate, nothing will change.

    The game is and has always been to draw in the small investors so that that the big guys have someone to fleece.

  6. skippy

    Bigger, Harder, faster, can they spin the merry-go-round faster, please! I wanta reach escape velocity.

    So now the dark priests/wizards of finance have called a séance to Divine the next incantation, and why do I feel like the villager being dragged off to the temple with increasing numbers of my brethren to have our still beating hearts ripped out, to garner their Gods favor again.

    Skippy…as long as we build on the ruins of our ancestors, we will never get off this merry-go-round. Ohh hell glory to the Empire and long may it crush us for its survival.

  7. Matt Stiles

    Hmm. Combine that with Dimon and Immelt on the NY Fed's Board of Directors, and you have a formidable combo of uselessness.

    I wonder what the total Assets under management is for all the above combined.

  8. Anonymous

    I would like to announce the formation of the working group to decide the the end of the SEC and the creation of a new agency under the the FED.
    Basically what they are doing here, right?

  9. Anonymous

    It's sort of like when Nero appointed a horse to the Senate.

    But at least a horse can do useful work, if necessary.

  10. Jesse

    It was Caligula, 'Little Boots,' who did that rather than Nero.

    Great citation though except in this case we don't get the whole horse, just the back end.

  11. Oregon Guy

    Thank you Jesse. I appreciate the spirit and moral sense you bring to your work.

    But I'm not feeling very charitable this evening.

    We're the hired help that hands out the towels in the rest room of the club, opens the door to the Park Avenue condo, and washes the limos for this bunch. What advice they will give to help the Fed achieve its mandate of "price stability" is a mystery. I suspect my interests as a citizen of the United States would be better served if a MA18A1 claymore was touched off during the opening remarks of the first meeting than by any policies that will come out of this group.

    Bernanke is only credited with a late assist on Greenspan's creation of history's greatest debt/credit bubble. This evidently rankles, so Ben is going for the unassisted record. The New York Fed is going all in so the boss can shatter the record. My money is on Helicopter Ben for a 3-1/2 year round-trip from 666 to 2,000 and back again on the S&P 500, crushing Greenspan's record of 7 years trough-to-trough. Ben's off to a great start IMHO.

    Dean Baker is almost as bitter as me today on his blog:

    "Remarkably, the Post apparently still has not noticed the $8 trillion housing bubble and the current recession. If it had, it would realize that this is one of the main motivations for the bill [Ron Paul's bill to audit the Fed]. The Fed was unbelievably irresponsible/incompetent in allowing the growth of such a dangerous bubble.

    The country now has almost 25 million people who are unemployed or underemployed as a result of the Fed's disastrous policies. Millions of people are losing their homes and tens of millions are losing their life savings. The country is likely to lose more than $6 trillion in output ($20,000 per person) due to the Fed's inept job performance. In this context, warning the public of dire consequences from passing this bill is more than a little silly."

  12. tom a taxpayer

    Goldman Sachs cuts out the middle man. The NY Fed goes from bad to worse…from Geithner to Goldman Sachs's Dudley. Dudley do-right-for Goldman Sachs.

    Thanks Jesse for the advance warning about the NY Fed's gang of 13 (G-13). The G-13 is the white collar version of the MS-13 gang, aka Mara Salvatrucha 13.

  13. Doc Holiday

    Little Boots and Palin born again — "This is like deja vu all over again" …

    In 39, Caligula performed a spectacular stunt by ordering a temporary floating bridge to be built using ships as pontoons, stretching for over two miles from the resort of Baiae to the neighboring port of Puteoli.[64] It was said that the bridge was to rival that of Persian King Xerxes' crossing of the Hellespont.[64] Caligula, a man who could not swim,[65] then proceeded to ride his favorite horse, Incitatus, across, wearing the breastplate of Alexander the Great.[64] This act was in defiance of Tiberius' soothsayer Thrasyllus of Mendes prediction that he had "no more chance of becoming emperor than of riding a horse across the Bay of Baiae".[64]

    Praise be Wiki

    Full Disclosure: I have no idea why this is being posted…

  14. attempter

    I was just thinking the other day about how even Caligula and especially Nero, of such bad reputations, had a much better record as populists and as builders of public works than recent American president.

    While perhaps they did it mostly for political and power reasons (though Nero at least seems also to have personally inclined that way), it's still strange to contemplate how such allegedly nasty emperors were more likely to side with the people vs. entrenched wealth than e.g. Obama is.

    I've also long been struck by the Nero's reaction to the fire of 64, where he acted with great speed and vigor to alleviate the plight of the outburnt, throwing open all imperial buildings and gardens, setting up a tent city on the exercise field, and having large amounts of food brought in.

    The contrast with Katrina is all too glaring. (Though I'll concede, Nero's rebuilding program does leave open the question to what extent his own version of disaster capitalism may have been operative. But Nero did make substantial funds available for non-rich residential rebuilding, and much of the rebuilding was for public amenities. So there too the intent and execution was vastly superior to that of Bush.)

    It's simply the difference between a leader, a country, and a people who really do not just say, but live, "Yes we can", as opposed to an exhausted, sick, decadent country which can still say any stupid thing it wants, but can only DO "No, we can't", and whose leaders reflect that.

  15. Anonymous

    "In case you were wondering, ZeroHedge, Karl Denninger, GATA's Bill Murphy, Peter Schiff, Eric Janszen, Jon Stewart, and WalStreetPro are NOT included in the list of appointees."

    I don't know why Schiff, Janszen and Stewart were invited. They ARE as Jewish as the Federal Reserve.

  16. dd

    Today's FT brings this bit of utter Onion:
    Geithner urges end to ‘dumb regulation’
    Tim Geithner, Treasury secretary, said there was “a lot of dumb regulation in our country” and urged lawmakers to enact quickly the administration’s plan to reform the system, in spite of resistance from the financial industry and other regulators.,Authorised=false.html?

    In Obama land dumb regulations are at fault; not dumb regulators. It's time to throw out the Ivy League dummies.

  17. tom a taxpayer

    Guess who was head of the NY Fed search committee that selected former Goldman Sachs managing director William C. Dudley as President of NY Fed.

    Excerpt from NY Fed press release (January 27, 2009):

    "NEW YORK—William C. Dudley was named today to serve as president and chief executive officer of the Federal Reserve Bank of New York. His appointment by the board of directors of the New York Fed, succeeding Timothy F. Geithner who was sworn in as Secretary of the Treasury yesterday, was approved by the Federal Reserve Board of Governors."

    "Stephen Friedman, chairman of the New York Fed’s board of directors and of the search committee that selected Mr. Dudley, said, “We were fortunate to have an exceptional slate of candidates for the post. The board is very pleased with the selection of Bill Dudley. His deep economics background, extensive working knowledge of the markets and hands-on policy making role make him an outstanding choice to succeed Tim Geithner.”

    Yes, the same Stephen Freidman who was on the Goldman Sachs Board of Directors when the NY Fed saved GS from extinction by making it a bank holding company, and when these sorry GS losers were saved again from extinction by bailing out AIG. Yes, the same Stephen Freidman who claimed he had no conflict of interest as a NY Fed bank regulator regulating Goldman Sachs while he remained a Goldman Sachs Director and big stockholder of Goldman Sachs.

  18. tom a taxpayer

    (cont'd) If anyone doubts that Geithner is a lackey for Goldman Sachs, consider it was Geithner, then NY Fed President, who in October 2008 requested a waiver for the conflict of interest of Goldman Sachs Director Stephen Friedman continuing as Chairman of the Board of NY Fed that regulates Goldman Sachs. Geithner "argued that Friedman needed to remain chairman of the N.Y. Fed board to find a suitable replacement for Geithner as he moved on to be secretary of the Treasury. Friedman chose a fellow former Goldman Sachs exec for the job."

    Some press accounts try to play down the Friedman's conflict of interest as a "technical violation". No, it was a clear violation, a gross violation, an open and flagrant violation. The dictionary definition of "conflict of interest" is when an individual or organization has an interest that might compromise their actions, such as NY Fed Chairman Stephen Friedman regulating Goldman Sachs while he remains a Director and big stockholder of Goldman Sachs. Stephen Friedman is the poster child for conflict of interest. "As Jerry Jordan, former president of the Fed Bank in Cleveland, told the Journal in reference to Friedman's obvious conflict of interest, "He should have resigned.""

    Friedman and Geithner insured that William Dudley, former Goldman Sachs executive, got Geithner's job of NY Fed President. Geithner, again demonstrating he is Goldman Sachs's hand puppet, lobbied the NY Fed Board of Directors to appointed Dudley as Geithner's succesor. After all, Dudley was Geithner's partner in killing Goldman Sachs competitors Bear Stearns and Lehman Brothers and in the bailout of AIG/Goldman Sachs.

    Can U.S. Secretary of the Treasury Geithner be expected to investigate and prosecute NY Federal Reserve Geithner for the dirty deals he made with AIG, Bear Stearns/J.P.Morgan, etc.? No more than Treasury Secretary Paulson could be expected to investigate and prosecute Goldman Sachs CEO Paulson. Timothy "the bag man" Geithner and Hank "the mole" Paulson have screaming conflicts of interest which should have disqualifed both from serving as U.S. Secretary of Treasury.

    Geithner is part of the problem, not the solution. In fact, he was, and continues to be, at the heart of the problem. Geithner must go! Dudley and all the other Goldman Sachs moles must go! Enough is enough.

  19. Anonymous

    Jojo – I, like a lot of my friends, would love to pull my money out of the market, out of big banks. However, we are at a loss of what to do, the CETI search having not yet turned up any life elsewhere in this universe. Is there a blog where they discuss strategies on this?

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